Don’t click the “buy” button yet! Platform Meta (META) may look tempting to some buyers after Wednesday’s earnings carnage, but even a cursory glance at the daily chart tells us that the downside for META offers more options from here.
Mark Zuckerberg’s company, which owns Facebook, Instagram and WhatsApp, extravagantly missed third-quarter 2025 GAAP earnings per share (EPS) on Wednesday. Meta reported GAAP EPS of $1.05, a whopping 84% below the Wall Street consensus of $6.71. The shortfall is owed almost entirely to a one-time tax charge of nearly $16 billion caused by the Trump administration’s One Big Beautiful Act passed earlier this year.
This made META possible stock it fell more than 11% on Thursday and hit new lows on Friday.
Meta Platforms stock news
Many retail investors know that buying Mag 7 stock after big swings down always seems to be successful in the end. And in that sense we agree. There are a number of reasons to strongly believe in the Meta’s return to new highs.
First, even if it causes an unexpected drop in Meta’s stock price, the government’s tax bill will substantially reduce taxes in the long run. In fact, the Met’s top executives are thinking of a lower tax rates will increase profit already in the 4th quarter.
Then there’s adjusted earnings. Excluding the one-time tax charge, adjusted earnings per share came in at $7.25, a full $0.58 ahead of analysts’ consensus. That means adjusted earnings, the number most investors focus on long-term, were up 20% from a year earlier.
Family of Apps ad impressions increased 14% year-over-year in Q3, while average cost per ad increased 10% year-over-year. This tells us that pricing power and demand remain robust, while Zuckerberg said Facebook Reels has hit a $50 billion annual rate. The company’s prized asset doesn’t seem to be slowing down.
If anything is troubling the market, it’s probably the high level of capital investment in Meta’s AI investments. The already heady 2025 median estimate of $69 billion was pushed up another $2 billion during the earnings call. Like side hustle Reality Labs, which lost another $4 billion during the third quarter, as it did in the previous five quarters, AI investments are likely years away from turning a profit, if at all.
With Metaverse’s investments losing a cumulative $73 billion to date, investors could be forgiven for thinking the big AI data center investment was just another bon mot requiring eventual write-offs. News On Friday, word got out that Meta was looking to raise $30 billion in a bond sale to keep the AI ​​going, a sign that the venture’s valuation is steep.
Meta Platforms Stock Forecast
The daily chart is fairly self-explanatory. While novice traders may be tempted by the prospect of a quick return to $700, the more experienced pro sees two notable gaps to fill.
First comes the May 12 gap, which leaves a gap between $611 and $619. Markets love to close gaps and to do so, META needs to trade 6% lower to reach $611.
The second gap also comes from May, the first day of the month to be exact. That difference from $558.50 to $570.50 would require META to mark lower by cutting another 14% from Friday’s close of $649.50.
META daily stock chart
But not to be outdone, the bulls then have a higher gap to close as well. The gap created by Wednesday’s profit slide requires META to trade candle-by-candle from $680 to $742.50, which may take some time. It would be fun if META could close the two bottom gaps before closing the top gap. That would be a wild ride for sure.
